Moody’s forecasts growth for Mexican tourism in 2017
According to Moody’s latest report, Mexico’s tourism activity is outpacing economic growth, a trend likely to continue in 2017.
The tourism industry in Mexico will continue to grow in 2017, thanks to the reduction in fuel prices, a strong dollar and increased competition among airlines, which will encourage companies in the industry, said the rating agency Moody’s.
Original Image: “Cabo Pelican Beach” by Nan Palmero, used under CC BY 2.0 license, via Flickr.
The agency also said that among the factors that will support the tourism sector is business strength in the north-central Bajio region – driven by the automotive industry, which will continue to push the demand for urban and business hotels in this area.
He also said a weaker peso will continue to attract foreign travellers to Mexico’s beach destinations, as well as a new air trade agreement with the US, which will increase competition between airlines and promote the expansion of airports across the country.
Original Image: “A night in Oaxaca City” by Adam, used under CC BY-NC 2.0 license, via Flickr.
However, the report cited some risks for the industry. The move away from trade agreements with the United States poses a threat to future development. This comes at a time when the Mexican government has proposed a cut of 35% for expenditure of the Tourism Ministry for 2017, as part of its proposal to cut the federal budget, which is likely to be approved by the senate.
Moody’s considered the country’s tourism activity is currently outpacing economic growth, a trend that is expected to continue in 2017 considering the expected rise in spending on travel and vacations, in which domestic tourists represent 90%.
Original Image: “Teotihuacan” by LWYang, used under CC BY 2.0 license,via Flickr.
According to the report, foreign tourists spend the most on their vacations (about 93%), while domestic travellers spend 78%.
Moody’s noted that growth in the service industry, which is key to the tourism industry, has exceeded the country’s GDP. It also stressed that the tourism sector has grown fairly steadily for over a decade. According to this report, tourism contributes about 8.5% of GDP.